Funding & Future Need

Due to private ownership, national security concerns, and costs of service, there is limited public visibility into infrastructure investment levels and need across electricity, oil and gas, and alternative energy sources. Increased investment in alternative sources of energy for power generation, heating and cooling, transportation, and process industries is needed for a sustainable future, but investment in this area lags, principally due to a lack of federal energy policy.

Permitting processes present a particular challenge to energy infrastructure, amounting to substantial expenses and causing significant delays in the construction of critical lines necessary to bring renewable energy into the grid. Operations and maintenance spending by pipeline owners will continue to expand as new regulatory guidelines aimed at increased safety are issued by states and the federal U.S. Department of Transportation’s Pipeline and Hazardous Material Safety Administration (PHMSA) and as pipeline miles increase.

For electricity – including generation facilities and T&D infrastructure – the cumulative investment gap between 2016 and 2025 is estimated to be $177 billion. Funding is generally not an issue for building new T&D lines. At the same time, utilities face considerable pressure to cover maintenance and system upgrade costs through regulator-capped rate increases, and thus struggle to justify more reliable lines or make long-term investments. Industry players including Edison Electric Institute, representing electric utilities, and market research firm SNL Energy predict a modest reduction in T&D spending in years 2017 to 2020, while spending on new generation is expected to be flat, driven by older generation replacement and expanded renewable energy.

Investment in oil and gas infrastructure is driven by changing sources, increasing demand, and commodity pricing fluctuations, as well as physical condition, failure events, and regulation. In geographic regions where demand approaches or exceeds existing supply, commodity pricing is elevated and funding is justified; when commodity pricing is low, infrastructure investment declines.

Continuing Resolutions have kept surface transportation funding at pre-FAST Act levels, and therefore states have not seen the increased federal investment into surface transportation they so badly need.

Senate Appropriators have allocated funding to the High Hazard Potential Dams Program. Write your Members of Congress and ask them to fund this program so that our nation’s “D” dams can receive the investment they need.